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Three points to understand about assignment of no-fault benefits in Michigan

In our previous post, we looked at a recent Michigan Supreme Court decision holding that hospitals, clinics and other medical providers do not have the right to sue insurance companies for payment of bills of patients using no-fault insurance. As we noted, the decision could have a number of potential effects, including an increase in the assignment of no-fault benefits to providers.

Assignment of benefits agreements allow medical providers to collect benefits under an insurance policy that would ordinarily be payable to the insured. Different states have different laws when it comes to the assignment of the right to insurance benefits. There are a couple important points to understand about Michigan law. 

First of all, one limitation on assignment of benefits agreements in Michigan is that the right to collect future no-fault benefits may not be transferred to a third-party. This means that an insured is not able to assign benefits that will be due in the future to a medical provider.

Although future insurance benefits may not be transferred to a third party in Michigan, no-fault benefits which are past due or presently due may be transferred. Patients may, then, enter into effective assignment of benefits agreements with medical providers so long as the benefits at issue are already due under the policy.

In addition, although future no-fault benefits may not be assigned to a third party, it is still possible for insured to negotiate future no-fault benefits with their insurance company. Working with an experienced attorney can make this process more effective.


Aetna Casualty & Surety Co. v. Starkey, 323 N.W.2d 325 (Mich. Ct. App. 1982)

Professional Rehabilitation Associates, as Assignee of Clifford Lay v. State Farm (1998).

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